London Pensions Fund Authority has narrowed a search for money managers to run an alternative credit portfolio to four firms, said a spokesman for the £4.9 billion ($7.4 billion) pension fund.
The LPFA's pension fund committee is seeking to establish a framework agreement for investment in illiquid and liquid higher-yielding debt markets, said an RFP launched in September last year. This framework will be open to other local authority pension funds.
The managers are Apollo Management International, the London-based subsidiary of Apollo Global Management; Ares Management; Babson Capital Europe; and GSO Capital Partners. The spokesman said the pension fund expects to make a decision at the end of March on which money manager, or managers, it will appoint.
The allocation is expected to be between £100 million and £150 million, which “could increase if the framework is used by further eligible participants,” the RFP said.
“There was no such framework in existence which we were eligible to use so we decided to liaise with other (local government pension schemes) funds and to develop a framework from which mini-competitions could be run in the future,” the spokesman said in an e-mail. “This saves other LGPS funds from having to go down the full European tender route — thus saving them time and money.”